HH: Joined now by United States Senator Tom Coburn of the great state of Oklahoma. Doc Coburn, welcome back, it’s a pleasure as always. Tell me, when Kent Conrad walked out of the room, your colleague across the aisle in the Gang of Six talks, and said the Ryan budget was dead on arrival in the Senate, why didn’t you walk away from the table?

TC: Why would I walk away from the table? It doesn’t change the problems that are in front of our country. You heard a partisan statement. If I walked away from the table every time I heard a partisan statement, it doesn’t mean anything. We’re going to have a debt crisis. We’re either going to face it and do something about it, or we’re going to have a debt crisis and have other people do something about it for us.

HH: Now Senator, I agree with that, because I saw you on Bloomberg over the weekend making the very important point that if interest rates go up two percent, we owe another $300 billion dollars. We are flat out broke and up against the wall.

TC: We’re going down the tubes if we don’t do something this year about this problem.

HH: I agree. But if you stay at the table with a disingenuous partisan who rejects a comprehensive plan, you are asking them to lie to you. I mean, you’re asking to get beat up.

TC: No. Well, again, Hugh, I will tell you, these guys…I’m not much of a partisan.

HH: I know that.

TC: But these guys are. It’s in their blood. So you get the typical reaction. At the end of the day, two years from now, will we look back and say did we make the hard choices, regardless of what Kent Conrad said at one moment on a budget plan by Paul Ryan? We will have. Either we will have, or we’ll be, you know, we’ll be beholden, and we’ll be making choices much like Greece is making choices that they don’t want to have to make. So the thing is that nobody can criticize Ryan’s plan until they’ve got one of their own. And he doesn’t have one of his own.

HH: I agree.

TC: And so you discount what…look, 80% of what’s said in Washington is partisan. That’s what career politicians do. And you discount it and you work at facts.

HH: But if you don’t act in response to that, that means the side you represent, fiscal conservatives, always end up staying at the table and getting sucker punched like happened, I think, to the House. What did you make of this budget deal Friday night? That wasn’t much of a budget deal.

TC: It’s a budget deal, but it doesn’t lower the baseline in the out years the way they should have. And they got gamed a little bit. They actually cut some spending, but the spending wasn’t going to get spent anyway. So you know, I think they got sucker punched. I think there’s no question about it. The question did they still get another $16, $18 billion above the $12 billion they’d already got? Yeah, and those are real numbers. Those will decrease the baseline. Is it what I would have wanted? No.

HH: You know, Senator, I just had a caller the last hour. It was so great. Her name was Jennifer from Houston. She wants me to support Donald Trump, and I don’t support Donald Trump. I don’t like the birther stuff. But she says to me we had an election. The country spoke. The country wants the Republicans to stand there and say no mas. They don’t want you to stand there and say hit me again.

TC: Well hey, I agree. But the fact is, you know, you give me a majority in the Senate, we could be able to do a lot of that. But we don’t, we don’t control the first committee in the Senate, Hugh. We don’t have the ability. We have 47 votes, of which three or four are squishes. So we have 43 votes. Now that’s okay to stop stuff. But on stuff like this, we probably won’t get it stopped.

HH: But you know that we’re worried that squishiness is spreading. We think squishiness is a malignancy.

TC: Well, I don’t think squishiness is spreading. What you had is people take on a label that they thought the electorate want, but they were squishes to begin with. I mean, you think is the Senate was truly a conservative Republican place that I would have had all this problem all these years to trying to get all these amendments passed to cut the size of government?

HH: True. Absolutely true.

TC: So the point is, there’s chameleons everywhere up here. What…this country didn’t get in trouble with one election. And it’s not going to get out of trouble in one election. It’s going to take two or three. And what is so great that’s happening in our country today is people like your friend in Houston, is awake. They’re paying attention. And there’s going to be a consequence to all this garbage that’s going on now. And don’t punish the Republicans that are doing the vote the right way. Punish the Democrats and the Republicans who by their history, and if you look at all their record, were never going to be with you anyway.

HH: Now Senator, I agree with you 100%, but then I say to you, why are you at the table? It’s like, “and now let me sell you another used car.”

TC: Because if somebody doesn’t get this fixed in two years, you’re not even going to have a radio show, Hugh.

HH: Well now, that would mean the end of the world.

TC: That would mean financial collapse. And if you think a debt crisis isn’t going to cause financial collapse in this country, and I’m talking 25% unemployment, a 10% decline in GDP, and a 12-15% inflation rate? I’ve got some land in Oklahoma in the middle of the Salt Plains I want to sell you.

HH: I agree that we are on the edge of a fiscal abyss. I talk about it every day, and I know what a debt crisis looks like, and I’ve got people that tell me what happens to the currency and we’ll print money. But that doesn’t…

TC: We’re printing money right now. 70% of all the bonds that we’re selling, we’re buying.

HH: Yup. And that’s just printed money.

TC: We’re printing money right now. It’s called financial repression. We are stealing the future from the middle class in this country as we talk. Ben Bernanke is.

HH: That takes, then I’m coming back to this hard. Then walk away from the table and denounce Kent Conrad as a nice man who is disingenuous, and the Democrats are laying again, and the budget deal was a big lie. And you’re not going to allow yourself to be a part of it.

TC: Well, if I can win. You know, I think you sell me a little short. I’ve never lost yet. I win by losing. We started with the Bridge To Nowhere. We cut $5 billion last week in real dollars. I’m going to cut another $5 billion associated with this ethanol deal. That’s $10 billion of real money. If I walk away because the game isn’t going my way right now, I can’t have any impact. And that’s what career politicians do. I’m in there, chiding people inside the room. You don’t know what goes on inside the room. But the fact is if I think I don’t have a good deal, I’ll never agree to it.

HH: Okay, let’s get to brass tacks. I have told you before that I would much rather see a sales tax than anything else in order to get everyone into this game. Is a sales tax on the table in the Gang of Six negotiations.

TC: No, I’m the co-sponsor of the Fair Tax. I’ve been a co-sponsor every year I’ve been in the Senate. It’s not on the table. Tax reform is on the table. And what we can do is we can reform and lower the rates, and then we can buy back, like you’re interested in home mortgages, we can buy them back up.

HH: Now I will never go…we have had that conversation as well, but I’m asking, if you want to expand the tax base, and you want to get everyone into the game, get everyone into the game.

TC: Look, send me some Senators who have some gonads.

HH: But that just means that you are going to be hostage to the least squishy Republicans’ view of what ought to be done, and that’s Dick Darmin. This is the ghost of Dick Darmin back from 1990 to take us over the cliff again.

TC: Well, maybe so. But the point, your answer is, is since we don’t have 60 fiscal conservatives in the Senate, just don’t negotiate.

HH: No, my answer is wait until September, and then back up, all of you go over the House steps as opposed to having the House freshmen come over to your steps, and stand there next to John Boehner, and say Mr. Speaker, do not let them do this again.

TC: I agree with you. I like it all, too. Now how are you going to get that done?

HH: You’re just going to stand there, because the American people will stand…not pass a thing. It’s going to come to shutdown, except for defense. You’ve got to pass the Defense appropriation.

TC: Yeah. So how do you pass Defense and not pass anything else?

HH: First thing that the House has got to do, I argued this yesterday with David Dreier, is pass the House Appropriations bill, send it over the Senate, and then every day, Tom Coburn and his buddies ought to go out there and say the United States military ought to be above politics, and you beat them over the head with the media.

TC: I like that plan. I have no problem trying to do that. In the meantime, when QE2 ends, and interest rates start rising, what do we do in the short term?

HH: Honest to goodness, I don’t know, Senator, because you’re right. It’s $300 billion dollars, and nobody understands we’re just going to print it. And that’s going to mean, I don’t know, 10% inflation? Do you think that much?

TC: So let me ask you this. If I could get a true down payment of around $800 billion dollars this year, with a mandate that we get another $3.3 billion dollars, and 85% of it come from cuts, 15% comes from dynamic effects of rate lowering, what would you say to that?

HH: I’d say amen.

TC: Okay, that’s what we’re trying to work on. But if I don’t get something that good, I won’t be going for it.

HH: I will, if Dick Durbin came around to that, he wouldn’t be Dick Durbin. The invasion of the body snatchers would have happened.

TC: (laughing)

HH: Am I right?

TC: Listen, you’re right in principle. The fact is if you could get us all on your playbook, it would work. But you know, I don’t think we have the time to wait that out for another…you’re talking, we’re not going to get anything done until ’12 or ’13.

HH: Senator, honestly, we’ve never tried. The Republicans have never stood in the gap and said this far and no farther. Newt in 1995 folded up like a chair. We just folded the same chair again. We have never tried.

TC: Well, I don’t think they folded the chair. They didn’t have a shutdown, but we’ve got more to go, and you don’t know that that’s going to pass yet.

HH: Oh, you’re right about that.

TC: You don’t know it’s going to pass.

HH: Senator, I so much appreciate your coming on. I really do. You’re about the…the guy, Mr. Smith comes to the radio show, and I appreciate it. Doc Coburn from Oklahoma, thank you.